WORKER’S COMPENSATION INSURANCE

All states require all employers to carry some form of Workers Compensation Insurance. The policy benefits are set by state law.

The employer is required to pay the Workers Compensation Insurance premium and the amount of the premium is based upon several factors: payroll, type of work, and the experience rating of the particular company. Each occupation is coded and defined by state law. Each occupation code is subject to annual audit for verification.

Workers Compensation protects employees who incur work-related injuries or occupational diseases. Workers Compensation Insurance only covers work-related accidents or diseases specifically related to employment. At the very minimum, Workers Compensation Insurance policies cover an employee's medical expenses, lost wages, disability income, and rehabilitation benefits.

The Workers Compensation Insurance system is a “No-Fault” program covering injured workers without regard to fault or negligence of either the employer or employee. The injured worker’s “sole remedy” is under the Workers Compensation Insurance policy. The injured workers cannot to sue the employer. A goal of Workers Compensation Insurance is to cover the worker’s injuries while eliminating litigation costs for both sides.

GAlmost all states are "open market", which means the coverage is underwritten by private insurers; and some states are "closed" or "monopolistic" - the coverage is underwritten by a state-sponsored fund (ND, OH, WA, WV, WY). In open market states, rates can vary between insurance carriers depending upon the type of business the carrier is attempting to attract.

Employers with one or more employees are subject to the provisions of their state's Disability Benefits Law. Disability Income pays the worker some portion of the worker’s lost wages. It is fairly common for the worker to receive two-thirds of the wage as a disability income payment. The disability income payments cease when the injured worker goes back to work or reaches Social Security age.

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